a.
Cash and Cash Equivalents:
Cash is one of the most liquid assets which is a determinant of the liquidity position of any entity. Cash equivalents are short-term investments that can be converted into known amounts of cash without any significant risk of changes in value.
Requirement 1
To Identify:
The total amount of cash and cash equivalents for the fiscal years ended September 28, 2019, and September 29, 2018.
b.
Vertical Analysis:
In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.
Requirement 2
To compute:
Cash and cash equivalents as a percentage of total current assets, total current liabilities, total
c.
Horizontal Analysis:
In horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.
Requirement 3
To compute:
Percentage change between the beginning and ending cash and cash equivalents for the fiscal years ended 2019 and 2018.
d.
Days’ sales uncollected:
This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.
Requirement 4
To compute:
The days’ sales uncollected for both the fiscal year ending 2019 and 2018.
e.
Changes in Days’ sales uncollected:
The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.
Requirement 5
Whether A’s receivables collection is showing a favorable or unfavorable change.
Want to see the full answer?
Check out a sample textbook solution
Chapter 6 Solutions
FINANCIAL AND MANAGERIAL ACCOUNTING
- What is the cost of the unsold merchandise on these financial accounting question?arrow_forwardWhat are the proceeds to Brighton on these financial accounting question?arrow_forwardBigco Corporation is one of the nation's leading distributors of food and related products to restaurants, universities, hotels, and other customers. A simplified version of its recent income statement contained the following items (in millions). Cost of sales es Interest expense Income taxes Net earnings Sales Earnings before income taxes Selling, general, and administration expense Other revenues Total expenses (excluding income taxes) Total revenues $ 11,601 249 39 1,378 16,330 1,627 3,493 430 15,133 16,760 Prepare an income statement for the year ended June 30, current year. (Hint: First order the items as they would appear on the income statement and then confirm the values of the subtotals and totals.) Note: Enter your answers in millions rather than in dollars (for example, 5,000 million should be entered as 5,000 rather than 5,000,000). Revenues: Total revenues Expenses: BIGCO CORPORATION Income Statement (in millions) $ 0arrow_forward
- What is the coat of the merchandise assuming the discount is taken on these financial accounting question?arrow_forwardHow many direct labor hours were estimated for the year on these general accounting question?arrow_forwardYou have been asked by the owner of your company to advise her on the process of purchasing some expensive long-term equipment for your company. • Give a discussion of the different methods she might use to make this capital investment decision. • Explain each method and its strengths and weaknesses. • Indicate which method you would prefer to use and why.arrow_forward
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,